Sales Tax Instructions

Sales Tax Instructions, 2009
may be registered under the Sales Tax Act, 1990 and compliance of sales tax laws may
be ensured from them.
[Issued by the CBR, Islamabad under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (STP) addressed to the Collector of Customs, ST&CE, Quetta. Copy endorsed to the
Secretary (Anti Smuggling) (STE), CBR & all the Collectors of ST&CE.]
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O R D E R
C. NO.1(131)STT/98 DATED 23 RD OCTOBER, 2000
SUBJECT:-
GRANT OF EXEMPTION UNDER SECTION 65 OF THE SALES
TAX ACT, 1990.
M/s. Mandviwalla Mauser Plastic Industries limited, Karachi, who had set up a
manufacturing unit of plastic goods in Uthal, District Lasbela in July, 1990 continued
availing exemption of sales tax on their supplies under SRO 529(I)/88, dated 26.6.1988
till 14.11.1997 despite that the notification was time bound and exemption thereunder had
ceased to be available after 30.6.1996. The principal amount of sales tax not paid by
them for the period from 1.2.1996 to 15.11.1997 was Rs. 16 million. The Collectorate of
Sales Tax at Hub initially pointed out the taxability of their goods in February, 1997 and
then issued show cause notice on 24.03.1997. The case was adjudicated by the Assistant
Collector of Sales Tax, Hub vide his order-in-Original No. 7 of 1997, dated 20.9.1997.
The appeals filed by M/s. Mandviwalla Mauser Plastic Industries Limited before the
Collector of Sales Tax (Appeals), Karachi and Appellate Tribunal, Karachi were rejected.
2. In May, 1999, M/s. Mandviwalla Mauser Plastic Industries Limited
approached the Finance Minister offering to pay Rs. 4 million upto 30.6.1999 and the
balance of Rs. 12 million is six equal installments with the request for waiver of
additional tax and penalties. In response, they were informed to avail the amnesty of
additional tax in terms of SRO 679(I)/99, dated 12.06.1999 provided they paid the dues
upto 30.06.1999. They did not avail the amnesty and again approached the Finance
Minister in September, 1999 for 30 equal installments, which request was accepted to the
extent that they were allowed to pay principal amount in six installments with 1/3 rd of
such amount as first installment. This facility was also not availed by them.
3. Meanwhile, M/s. Mandviwalla Mauser Plastic Industries Limited first
approached the Central Board of Revenue and then the Finance Minister for grant of
exemption of sales tax under section 65 of Sales Tax Act, 1990. On receipt of Collect
rate‘s report in terms of Sales Tax Circular No. 2 of 1991, dated 20.10.1991 that Show
Cause Notice was issued on 24.3.1997, M/s. Mandviwalla Mauser Plastic Industries
Limited commenced payment of sales tax on 15.11.1997, the request for allowing the
benefit of section 65 was declined by the Federal Government. However, M/s.
Mandviwalla Mauser Plastic Industries Limited filed two Writ Petitions in Lahore High
Court bearing No. 18029/2000 and 18030/2000, which were allowed by the Court
declaring Board‘s letter of even number dated 3.4.2000 (in which the request of
exemption under section 65 was rejected) without lawful authority and with no legal
effect. Accordingly, the two applications of M/s. Mandviwalla Mauser Plastic Industries